Revolutionizing the Digital Advertising Industry i

Italo Gani and Daniel Armanto, the founder of Adskom Indonesia, a digital advertising company headquartered in Singapore with main operating base in Singapore. (GA Photo/Defrizal)

By : Diandra Sasongko and Lasya Chilla | on 4:16 PM September 06, 2015
Category : Archive

No consumer-focused company can survive without digital advertising, but in the processing side of the business, everything is still manual and involves a multi-step process.

Adksom Indonesia is the pioneer in Indonesia of transforming the process of digital advertising through programmatic advertising, successfully automating the process of digital ad buying.

Founded in 2013 by Italo Gani and Daniel Armanto, the firm is headquartered in Singapore but its main operating base is in Indonesia. Italo operates as the chief executive officer and Daniel is chief technology officer (CTO).

With a corporate vision that aims to “empower digital advertising industry with programmatic advertising platforms and insightful business services,” Adksom has helped reduce the lost opportunities and costs involved in digital advertising through eliminating the repetitive methods of manual advertising. In order to give better results for advertising buyers, the firm employs a balance of push and pull marketing techniques.

What Adksom does, the company’s co-founders told GlobeAsia in an interview in their South Jakarta office, is develop platforms for advertisers to run and display banner advertisements. Instead of buying advertising space on individual websites, it creates a platform that is connected to multiple websites, Italo explained.

With the help of its data management platform, Adskom is able to detect a consumer’s browser history, which enables it to provide customers with targeted advertising tactics. “With our technology, (advertisers) are able to mount a very targeted campaign,” Italo said.

Unlike traditional digital advertising, where a certain amount of revenue was lost due to the low return on investment caused by the manual selection process, Adskom is able to help its customers optimize their earnings.

The start-up has introduced three products into the market: Actio, Axon and Vasa, respectively Greek for action, nerves and brain.

Actio manages the firm’s services by connecting with advertisers; Axon, equipped with demand-side platforms, helps with market penetration by using a supply-side platform to help publishers optimize their inventory; and Vasa incorporates data targeting tools and acts as the data management platform.

Innovative founders

Before coming together to form Adskom, Italo and Daniel had each worked at several different companies. Upon graduating, Italo began working in Singapore. Daniel, on the other hand, founded social media platform Koprol, which was launched in cities across Indonesia as well as in Singapore and the United States.

Italo attended the Bandung Institute of Technology (ITB) while Daniel graduated from Purdue University in Indiana. Neither had plans to become entrepreneurs, with Italo’s aim simply being to graduate and follow a professional career path and Daniel’s to work in the US.

Italo, who graduated in industrial engineering, was working in Singapore in 2000 “before the (dotcom) bubble burst” and says there was a lot of talk about the internet business. He built up experience in advertising design working in companies in Singapore, always favoring small outfits over big ones.

Daniel, who attained a master’s degree in computer science, decided to return to Jakarta in 2003 and began working for retail banking giant Citibank. He then launched social media platform Koprol with partners Satya Witoelar and Fajar Budiprasetyo in 2008, and when Yahoo bought the location-based app in 2009 he began working for Yahoo Indonesia.

It was during Daniel’s time at Koprol that he and Italo met through a mutual friend. In 2011 Daniel had been working for nine months for software house Ice House when he met Italo again and the pair made the decision to “create something in the ad industry,” Daniel recalled.

As common in tech start-ups, Adskom’s office culture is very informal and the partners strive to keep their organizational structure flat to encourage familiarity among all employees.

“We hate office politics,” Italo said.

“People come in wearing shorts,” he added, emphasizing the casual culture of the company. Informality is also driven by the youth of most Adskom workers, mostly in their 20s.

Despite the casual organizational culture of the company, Italo emphasized the enterprise’s focus on business development.

“We need to show that we are a data company so we need to show that we are secure. We have a very strict security policy,” he said.

The Adskom team is based mainly in Indonesia, with 40 people working in Jakarta. Another six work in the US but none in Singapore, despite being a Singaporean company.

“We operate everything from Jakarta. I travel a lot to Singapore but we don’t have a dedicated team there,” said Italo.

Adskom’s clients include publishers such as Tokopedia, which approached Adskom looking to monetize its banner space. Adskom’s product Axon is utilized by publishers, making both publishers and advertisers clients of Adskom. It works with approximately 20 to 30 advertisers and runs the same number of campaigns each month.

“One client can run several campaigns,” Italo explained.

Challenges for the company lie mainly in human resources. “The industry is growing so much and the lack of human resources in the industry is impacting us,” Italo said.

Noting the growing presence of small start-ups similar to Adskom, Italo deems hijacking of staff as enemy number one. Shortage of supply in the ad industry’s labor market is attributed to the youthfulness of the industry.

Italo noted that companies are offering big money for workers in the industry, “so in terms of HR we’re competing with giants.”

The company plans to start small when expanding overseas because it “operates everything remotely from Jakarta.” Thailand is the first step: engineering will continue to be handled from Adskom’s Jakarta office but the company will have a sales and accounting team in Thailand.

The short flight time from Jakarta to Thailand will mean that workers there are easy to reach.

Unexpected growth

Asked about Adksom’s performance in the first quarter, Italo didn’t mention figures but said the company has been experiencing rapid growth. “We didn’t expect that we would grow this fast,” he added.

The company’s first year was spent developing its platform. In the second year trial-and-error methods were used to test everything. And in the third year, 2015, Adskom has been working more actively to maintain the growth of the business, and has been reaping good results.

When Adksom runs campaigns, it charges a certain percentage of the fees. When banners are put up on digital media and a consumer clicks on them, the revenue goes to Adksom’s client advertiser. That company then pays Adksom a percentage of its transactions revenue.

Just like any advertising business, Adskom faces seasonal revenue challenges. At the beginning of the year, revenue tends to increase and then at Idul Fitri revenue dips. Toward the end of the year, more orders come in as advertisers strive to spend budgets. “This is a typical industry pattern for advertising,” Italo explained.

Investor interest

As of today, Adskom has funding from six venture capitalists. In early July, it raised a Series A funding round led by Japanese advertising company Geniee, followed by Convergence Ventures and East Ventures, an existing investor.

Earlier, Adskom had a funding round where it raised a total of $850,000 from Digital Garage, East Ventures, Beenos Plaza and Skystar Capital.

Italo told GlobeAsia that a possible exit goal is an IPO. “It’s either an IPO or getting acquired. Probably another five years from now. To be honest, we haven’t thought about our exit strategy that much,” Daniel added.

The article was first published in GlobeAsia's September 2015 edition

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